Template-Type: ReDIF-Article 1.0 Author-Name: James Roumasset Author-Workplace-Name: University of Hawaii Title: Clubs, Coase, and the role of government Abstract: As Ronald Coase and others have shown, deducing the appropriate role of the government in the economy requires a comparative institutions approach. Trying to generalize from oversimplified specifications regarding transaction costs, according to whether exclusion is possible or not, is a futile exercise. An alternative to the Ostrom matrix is to distinguish private, club, and collective consumption goods according to their technical characteristics, specifically their degree of congestabiilty. The other box of the Ostrom matrix, “common pool” resources, can also be usefully analyzed from a club perspective. Spillover goods are spatial clubs. Lastly, a version of the Coase theorem is offered, which provides the foundation of comparative institutional analysis. Classification-JEL: H4 Keywords: Public goods, club goods, congestability, Ostrom matrix, comparative institutions Journal: Philippine Review of Economics Pages: 1-17 Volume: 57 Issue: 1 Year: 2020 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/990/899 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:57:y:2020:i:1:p:1-17 Template-Type: ReDIF-Article 1.0 Author-Name: Eiji Yamada Author-Workplace-Name: Japan International Cooperation Agency Author-Name: Satoshi Shimizutani Author-Workplace-Name: Japan International Cooperation Agency Author-Name: Enerelt Murakami Author-Workplace-Name: Japan International Cooperation Agency Title: The COVID-19 pandemic, remittances and financial inclusion in the Philippines Abstract: Recent literature has revealed that financial inclusion enhances economic opportunities and security in developing countries. Moreover, a greater inflow of remittances can promote inclusiveness. In this paper, we explore the potential impacts of the COVID-19 outbreak on financial inclusion by focusing on its detrimental effect on remittance flows to developing countries. Using a household-level dataset collected in rural regions of the Philippines prior to the outbreak, we confirm that remittances are associated with financial inclusion, particularly for women. We discuss the potential impacts of the pandemic on financial inclusion through the change in the flow of remittances. We show that a substantial decline in remittances caused by the COVID-19 crisis may have an adverse effect on financial inclusion in the Philippines. Classification-JEL: F22, F24, F36, G21, O16 Keywords: financial inclusion; SDGs; COVID-19, remittance, migration, Philippines Journal: Philippine Review of Economics Pages: 18-41 Volume: 57 Issue: 1 Year: 2020 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/992/890 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:57:y:2020:i:1:p:18-41 Template-Type: ReDIF-Article 1.0 Author-Name: Francis Mark A. Quimba Author-Workplace-Name: Philippine Institute for Development Studies Author-Name: Jonna P. Estudillo Author-Workplace-Name: University of the Philippines Title: Forces of modernization and the welfare of rural households: a saga of a village in Central Luzon, 1977-2013 Abstract: This study aims to give a detailed account of how household sources of livelihood, income, and poverty change under the pressure of four modernizing forces: (1) population pressure on closed land frontier; (2) implementation of land reform; (3) expansion of public infrastructures such as irrigation systems, roads, and schools; and (4) growing urban influences accelerated by improvements in transportation and telecommunication systems. This study was conducted in a village in Central Luzon where recurrent household surveys were done for 36 years from 1977 to 2013 encompassing the period of dramatic diffusion of modern rice technology. The major finding is that the interaction between the four modernizing forces and the diffusion of modern rice technology resulted in major economic and social changes that led to a rise in household income and prevented poverty from increasing. This study provides evidence contrary to the popular belief that the spread of modern agricultural technology and the encroachment of market activities into rural villages are harmful to the economic welfare of the rural Filipino people. Classification-JEL: O15, Q12, Q15 Keywords: poverty, inequality, irrigation, urbanization Journal: Philippine Review of Economics Pages: 42-70 Volume: 57 Issue: 1 Year: 2020 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/993/891 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:57:y:2020:i:1:p:42-70 Template-Type: ReDIF-Article 1.0 Author-Name: Elain Brianne O. Balderas Author-Workplace-Name: University of the Philippines Author-Name: Alyanna Maria Belen S.D. Bernardo Author-Workplace-Name: University of the Philippines Title: By his words alone: the economic consequences of Rodrigo Duterte Abstract: Philippine President Rodrigo Duterte has gained worldwide notoriety for his foul-mouthed statements, particularly for his threats directed towards the nation’s largest businesses and their powerful owners. Such pronouncements, which may be mistaken for shifts in government policy, may inadvertently provoke the business sector to react negatively. This paper examines whether President Duterte's negative business-related pronouncements have an appreciable effect on the Philippine Stock Exchange Index (PSEi). We apply an interrupted time series model on PSEi data for the period June 30, 2016 until December 31, 2019 to determine Duterte’s impact on stock prices under six different intervention scenarios. Specifically, we test different classifications of business pronouncements— initial business pronouncements, anti-oligarch statements, personal attacks, and combinations of the three. The results show a significant relationship between Duterte’s negative business-related pronouncements on the PSEi closing price, with the biggest changes occurring during the first times he brought up a particular issue or addressed a certain personality. We aggregated the losses for the period 2018-2019 resulting from these pronouncements. For the five pronouncements, we estimate the combined losses to rise from ₱1 million on the day they were made to ₱47 million within five days and, as the market continues to adjust, up to ₱441 million within ten days. Classification-JEL: C23, G12, G14, G41 Keywords: political communication, stock markets, efficient market hypothesis, event studies Journal: Philippine Review of Economics Pages: 71-100 Volume: 57 Issue: 1 Year: 2020 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/994/897 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:57:y:2020:i:1:p:71-100 Template-Type: ReDIF-Article 1.0 Author-Name: Joselito T. Sescon Author-Workplace-Name: Ateneo de Manila University Title: The conditional altruist and the Samaritan’s dilemma Abstract: The Samaritan’s dilemma refers to any situation in which an actual or expected altruistic behavior of one actor generates an incentive for exploitation on the recipient, such that the altruist suffers a welfare loss beyond the cost of the originally intended transfer. This study hypothesized that the Samaritan’s dilemma condition does (not) apply when the help given is a substitute for (complement to) the effort of the beneficiary to help herself. Using static and sequential game analyses, it is proven that either substitution or complementary condition could arise in the act of giving and receiving help. It is in the substitution condition only that the Samaritan dilemma arises. The players in a sequential game, with the first-mover advantage, can transform the game’s payoffs by setting assistance or work effort at the outset that forces the other player to adjust. Thus, Buchanan’s Samaritan’s dilemma is not a universally strategic outcome in the altruistic acts of giving. The empirical part tested if the Samaritan’s dilemma pervades or not in Philippine households by investigating the effects of expenditures of gifts on work hours. Household total transfers (consumption gifts plus remittances) and household members’ work effort are found substitutes. Thus, the Samaritan’s dilemma equilibrium is implied. However, there is also an implied equilibrium outside that of the Samaritan’s dilemma among high-effort workers: for these theoretically "altruist" workers, the gifts and income transfers are complementary to work hours. Classification-JEL: D64, D01 Keywords: altruism, games, dilemma Journal: Philippine Review of Economics Pages: 101-120 Volume: 57 Issue: 1 Year: 2020 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/995/898 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:57:y:2020:i:1:p:101-120 Template-Type: ReDIF-Article 1.0 Author-Name: Angelo Gabrielle Santos Author-Workplace-Name: George Mason University Title: Forecasting Residential electricity demand in the Philippines using an Error Correction Model Abstract: This study uses an Error Correction Model (ECM) to forecast residential electricity demand in the Philippines using household final consumption expenditure, residential electricity price, and temperature as explanatory variables. Results show that there is a long-run relationship between household final consumption expenditure and residential electricity demand. Estimates from the ECM are consistent with economic theory, and the model passed standard diagnostic and parameter stability tests. Forecast performance based on within-sample and out-of-sample forecasts of the ECM is also shown to be superior, relative to a benchmark Autoregressive Distributed Lag (ARDL) model. Simulations show that by 2040, residential electricity consumption will range from 42,500 gigawatthours (GWh) based on a weak income growth scenario and 62,000 GWh based on a combined changes scenario. Classification-JEL: C22, C53, Q47 Keywords: electricity consumption, forecasting, error correction model Journal: Philippine Review of Economics Pages: 121-151 Volume: 57 Issue: 1 Year: 2020 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/996/900 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:57:y:2020:i:1:p:121-151 Template-Type: ReDIF-Article 1.0 Author-Name: Marianne Joy A. Vital Author-Workplace-Name: University of Cambridge Title: Then and now: analyzing Filipino youth education and work decisions following the 12 basic education reform Abstract: This research aims to analyze the trends in youth education and work outcomes before and after the implementation of the kindergarten to grade 12 (K-12) Basic Education Reform, focusing on three broad outcomes: (1) in education, (2) in employment, or (3) not in employment, education or training (NEET). It determines certain characteristics associated with each of these outcomes by employing multinomial logistic regression analysis. The study finds that although the overall likelihood of being in education has increased after the reform, certain groups, particularly disadvantaged ones, still have higher probabilities of being in employment or NEET rather than continuing their education. Furthermore, after the reform, young men from disadvantaged groups have a higher probability of being NEET. Albeit minimal, this merits investigation and monitoring in the future, as it may worsen inequalities. Classification-JEL: I21, I24, J13, J21 Keywords: youth labor market, youth school-to-work transition, education reform, youth not in education, employment, or training Journal: Philippine Review of Economics Pages: 152-187 Volume: 57 Issue: 1 Year: 2020 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/997/902 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:57:y:2020:i:1:p:152-187